Dumping is a form of international price discrimination, when the company sells the product in the importing country at a lower price (at a lower price than the normal value), than in the market of the exporter's local market. The Law of Georgia "On the Introduction of Anti-Dumping Measures in Trade" aims to protect the local industry from injury or the threat of such injury caused by dumped imports.
It is important to distinguish the term "dumping" from the case of selling a product at an unfairly low price (the so-called predatory price) by an economic agent with a dominant position in the country's local market. The dumping only refers to the imported products, and its impact is specifically assessed for the domestic industry.
The normal value of the product is one of the important components in anti-dumping investigation - it should be compared with the export price of the product and thus the existence of dumping should be assessed.
If the product is produced in a country with a market economy, the normal value, the so-called the domestic selling price, represents the price of the product in the exporter's local market. Normal value is determined by EXW prices, deducting all internal taxes, which are intended for the local consumption in the exporting country.
A product that is identical to the object of investigation, that is completely similar to this product. In the absence of such a product, a like product is a product that has the characteristics that are very similar to the characteristics of the object of investigation.
The special anti-dumping tariff is a predetermined percentage calculated from the customs value of the object of investigation; It is determined for each exporter individually, taking into consideration the individual dumping margin. If a common dumping margin is established by the investigating authority, an anti-dumping tariff shall be imposed on each known foreign exporter or producer of the object of investigation in line with the principle of non-discrimination.
A special anti-dumping tariff is introduced for not more than five years. Based on the repeated investigation [sunset review], this term can be extended by no more than 5 years.
A general price comparability standard has been developed by the World Trade Organization for the anti-dumping investigation, which implies the derermination of dumping margin. The dumping margin is the difference by which the normal value of the product exceeds the export price. It is expressed as a percentage of the export price. It is of importance that the anti-dumping measure is introduced within the dumping margin.
For example, if the EXW normal value of the product is 100 GEL, and the EXW export price is 80 GEL, the amount of dumping is the difference between them, which equals to 20, and the dumping margin will be 20/80 = 25%
The Agency conducts anti-dumping investigation on the basis of the application lodged by or on behalf of the domestic industry. The application is available on the website. During the investigation process the agency determines that:
It is important that the application must be supported by relevant evidence, so that the investigating authority can make a reasoned and justified decision to initiate an anti-dumping investigation. The guidebook for filling out the application is available on the website of the Georgian National Competition Agency.
The application can be submitted by the local industry that produces the like product of an object of investigation; Or any natural or legal person or any association regardless of a legal personality, acting on behalf of the local industry.
In the anti-dumping investigation proceedings, at the material admissibility stage of the application, the Investigation Authority checks the eligibility of the applicant according to the two criteria:
a. The application is supported by those local industry whose collective output constitutes more than 50 percent of the total production of the like product produced by that portion of the domestic industry explicitly expressing either support for or opposition to the application.
b. Simultaneusly, the local industry expressly supporting the application must account for 25 per cent or more of total production of the like product produced by the total local industry.
After the submission of an application, the Investigation Authority makes a decision on launching an investigation within 45 calendar days. This period may be extended by the Investigation Authority for 15 calendar days for the purpose of receiving additional information from the applicant.
Within 3 working days from the receipt of the application, the Investigation Authority verifies the formal compliance of the application. In case of deficiencies, the applicant will be notified and a deadline will be set for eliminating the deficiency.
The period of anti-dumping investigation lasts no more than 12 months. This term can be extended for no more than 6 months.
The final decision on the introduction of the anti-dumping tariff is taken by the Government of Georgia. In particular, within 30 days from the submission of the report by the investigation authority, the Government of Georgia makes a decision on the introduction, revision or cancellation of anti-dumping measures.
In the anti-dumping investigation, the preliminary anti-dumping tariff/security form, the price undertaking and the special anti-dumping tariff can be introduced.
A preliminary anti-dumping duty is applied during the investigation period in order to prevent injury or threat of injury to the local industry by the dumped imports.
If the Investigating Authority finds that the dumped imports have caused or are threatening to cause injury to the domestic industry, a provisional anti-dumping duty/security form may be imposed, in no less than 60 calendar days from launching an investigation , and the preliminary measure is imposed for no more than 4 months. period can be extended from 6 to 9 months.
The anti-dumping legislation envisages the possibility for the exporter to make a voluntary commitment regarding the price, which provides for the exporter's obligation to review the established price of the object of investigation or to terminate exporting the object of investogation at a dumping price to the customs territory of Georgia. The Agency assesses the reasonableness of approving such an obligation, and simultaneously determines the type and volume of the preliminary anti-dumping measure, in case the exporter does not fulfill the voluntary obligation.
